Business groups file lawsuit seeking to block new campaign finance law
California business groups and two Sacramento area elected officials have filed a lawsuit to block a new state law that seeks to reduce “pay to play” scenarios in local politics.
The lawsuit, filed Wednesday in Sacramento Superior Court, names the California Fair Political Practices Commission as a defendant. It was filed by Sacramento County Supervisor Pat Hume, who was elected in November; Rancho Cordova City Councilman Garrett Gatewood; the California Restaurant Association; California Realtor Association; California Building Industry Association and several other lobbyist groups.
State Senate Bill 1439, which went into effect Jan. 1, requires city and county elected officials to recuse themselves from certain decisions that would financially benefit any entity or person that donated over $250 to that official’s campaign in the past year. It allows the official to return the money in order to cast a vote.
The law applies to permits, licenses and contracts, and might also be expanded to things like rezoning for development projects, if the FPPC interprets it that way, said bill author Sen. Steven Glazer, D-Orinda.
The Legislature last year passed the bill without controversy, and Gov. Newsom signed it in September.
But the lawsuit alleges that under the state constitution, lawmakers never actually had the authority to amend the Political Reform Act of 1974 in such a significant way. The lawsuit also alleges the law could negatively impact homeowners who oppose or support a development because of its impact on their property values, for example.
“On its face, SB 1439 does not address actual quid pro quo corruption,” the lawsuit states. “It is overbroad and violates the constitutional rights of thousands of contributors and local elected officials.”
The group sued the FPPC because it is the state agency responsible for determining when officials violate the law, which is punishable with fines up to $5,000.
“We’re disappointed to learn a lawsuit has been filed regarding SB 1439 after the commission voted unanimously to support it and months after it unanimously passed the legislature and was signed by the Governor,” FPPC Chair Richard C. Miadich, also a defendant, said in a statement. “It also comes months after we’ve begun issuing guidance, gathering public input and crafting regulations to implement the law. We’ll continue doing just that and will continue to enforce the law unless and until a court ruling says otherwise.”
The FPPC has not yet fined any elected officials for violating the law, spokesman Jay Wierenga said.
Glazer said the law will start to repair trust between residents and their local governments.
“The ‘pay to play’ scheme has been going on for decades in various communities thorough California, and would be prohibited under this law,” Glazer said. “To the local officials out here, I would say ‘don’t take money from people who stand to lose or gain from the decisions you make.’”
Several of the plaintiffs have spent big money in local Sacramento races in recent years, especially the California Realtor Association. That group in 2022 and 2021 spent over $100,000 on negative ads against Caity Maple, who campaigned for stricter rent control. She won a seat on Sacramento City Council in November. Those donations were through an independent expenditure committee, however, which the new law does not apply to.
The lawsuit’s other plaintiffs include the Family Business Association of California; the California Business Properties Association; the California Business Roundtable; the Sacramento Regional Business Exchange; and the California Manufacturers and Technology Association.
The law will not apply to donations made in 2022, according to the FPPC.